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Monday, August 8, 2011
Risk Control
Always cut your losses short. One of the main rules for risk control is to cut your losses short. It is perhaps the single most important trading rule. There is certainly no shortage of traders who have ignored this rule and their account virtually obliterated by one or two trades and most will repeat the mistake many times before reversing course.
Look at the big picture and the whole market. A mistake made by many traders is that they become so involved in trying to catch the minor market swings and they miss the big picture of the major price move.
Never double up near the original trade entry point after having been ahead. It is better to cut your losses and get out.
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